The U.S. Energy Information Administration (EIA) reported a withdrawal of 219 Bcf natural gas from storage for the week ended Jan. 21. The result was steeper than the median estimates found in major polls and much more so than the five-year average, sending Nymex natural gas futures higher.
The pull marked the biggest of the winter season to date and pushed inventories below average levels.
“It was colder than normal over the eastern half of the U.S.” during the covered period, fueling robust heating demand and necessitating large draws on inventories, NatGasWeather said.
Production was also lower than recent highs during the week because of weather-induced freeze-offs.
The print was “a strong number in terms of the supply/demand balance, thanks to production declines keeping supply lower, something we appear stuck with for at least a couple more numbers, as we are targeting a draw of 275 Bcf for next week,” Bespoke Weather Services said.
Ahead of the report, the February Nymex contract was up 2.3 cents to $4.300/MMBtu. It rose a few more ticks shortly after EIA posted the result and kept climbing. By 11 a.m. ET, the prompt month was at $4.392, up 11.5 cents from Wednesday’s close.
Prior to the print, a Bloomberg survey of analysts produced a range of withdrawal projections from 198 Bcf to 225 Bcf, with a median pull of 215 Bcf. The Wall Street Journal poll results averaged 215 Bcf, though the span of estimates was tighter. Reuters polled 17 analysts, whose estimates were as steep as 230 Bcf with a median draw of 216 Bcf.
NGI modeled a 198 Bcf pull. Last year, EIA recorded a 137 Bcf withdrawal from storage in the similar week, while the five-year average draw is 161 Bcf.
The draw left inventories at 2,591 Bcf, below the year-earlier level of 2,899 Bcf and below the five-year average of 2,616 Bcf.
By region, the South Central decrease of 81 Bcf led all others and included a 53 Bcf pull from nonsalt facilities and a 29 Bcf decrease in salts. EIA noted that totals do not always equal the sum of components because of independent rounding.
The Midwest and East regions followed with pulls of 69 Bcf and 60 Bcf, respectively, according to EIA. Mountain region stocks declined by 8 Bcf, while Pacific inventories were flat.
Looking ahead, Bespoke expects strong withdrawals over the next three weeks, given the recent light production and rash of wintry weather. Participants on The Desk’s online energy platform Enelyst echoed that thinking.
“I’m expecting the next three reports to be 200-plus,” pointing to five consecutive reports above 200 Bcf, Enelyst managing director Het Shah said. “I’m at minus 257 for next week.”
© 2022 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |